Military families must pay to extend TRICARE coverage to adult dependents

By Amanda Palleschi

October 10, 2012

A popular component of the 2010 Affordable Care Act allowing adult children to stay on their parents’ health care plans until age 26 has been a little less popular among military members. That’s because military families covered by TRICARE must pay as much as $200 a month to benefit from extended coverage.

According to The Wall Street Journal, families must pay either $176 or $201 a month per young adult dependent to prolong coverage, depending on their specific TRICARE plan. Most families in private plans do not pay for the extension. The 2010 health law did not apply to TRICARE, but a separate law required the military health plan to adopt the popular provision of the Affordable Care Act. Legislators, however, would not support providing the extended coverage to TRICARE beneficiaries for free, the Journal reported Monday.

The Defense Department told The Wall Street Journal that the fee has deterred military families from seeking the extension: of 230,000 young-adult dependents of service members who could have signed up, only 20,740 had opted for an extension by the August deadline.

Before the Affordable Care Act, TRICARE allowed children to stay on their parents’ plans only until age 21, or 23 if the child was a full-time college student. Children of civilian federal employees covered by the Federal Employees Health Benefit Plan were eligible for extended coverage under the law starting in January 2011. Children who lose FEHBP coverage when they turn 26 qualify for temporary continuation of coverage for up to 36 months.

TRICARE fee hikes are on the table this budget cycle as part of the Defense Department’s efforts to rein in spending. The Obama administration’s budget request includes new TRICARE co-pays, additional increases to TRICARE Prime enrollment fees, initiation of standard and extra annual enrollment fees, and adjustments to deductibles and catastrophic coverage caps. These efforts are expected to save the department as much as $12.1 billion during the next 10 years. Lawmakers, however, have resisted plans to increase fees.

Most TRICARE beneficiaries do not pay premiums to participate, and the cost of premiums for each young adult under TRICARE is expected to fall to $152 or $176 per month. The fees are based on data for medical costs incurred by similar dependents and administrative expenses, according to the Journal.